26.04.202114:48 Forex Analysis & Reviews: GBP/USD: plan for the US session on April 26 (analysis of morning trades)

To open long positions on GBP/USD, you need to:

In my morning forecast, I paid attention to the level of 1.3892 and recommended making a decision. Let's look at the 5-minute chart and look at the entry points: after a small downward correction of the pair in the first half of the day in this range, the bulls achieved the formation of a false breakout, where I recommended opening long positions in the morning. As a result, the upward movement was about 35 points, which is quite good for intraday trading. Already closer to lunch, the bears returned the pair to the level of 1.3892 and achieved its breakdown.

In the second half of the day, you need to act very carefully, as it is far from clear where the trend will continue, especially if the level of 1.3892 is quite "smeared" and does not work. Only a return and a test of the level of 1.3892 from top to bottom on the volume will allow you to increase long positions, which forms a signal to buy the pound in the expectation of growth to the maximum of 1.3944. A more distant target will be the area of 1.4000, where I recommend taking the profit. If the pressure on the pound persists in the second half of the day, I recommend not to rush to buy: the optimal scenario will be a test of large support of 1.3838, which was formed last Friday. From this level, you can buy the pound immediately for a rebound with the expectation of a correction of 20-25 points within the day.

To open short positions on GBP/USD, you need to:

Sellers still coped with their task and achieved a breakdown of the support of 1.3892. In the second half of the day, you need to wait for the test of this level from the bottom up. With or without a false breakout, an update to the level of 1.3892 on the reverse side should lead to the formation of a signal to open short positions in the continuation of the downward trend in the pound to the support area 1.3838. It will be possible to talk about a breakdown of this range only after good data on the US economy, which may push the pair even lower – to the area of 1.3792, where I recommend taking the profits. In the scenario of the bulls returning control over the level of 1.3892, the best option is to sell the pound only for a rebound from a large local high of 1.3944, based on a downward correction of 20-25 points within the day. The next major resistance for selling is seen around 1.4000.

Let me remind you that the COT reports (Commitment of Traders) for April 13 recorded an increase in both long and short positions, while the total non-commercial net position increased, which indicates a higher activity of buyers of the pound. The good fundamental data that has recently been released on the UK economy proves a fairly high probability of strong economic growth in the 2nd quarter of this year, which will continue to contribute to the growth of the British pound in the medium term. The Bank of England has long been talking about how to proceed with a stimulating monetary policy since as the economy grows, there will be additional problems with inflation. The pound's growth earlier this week once again proves its attractiveness to major players, and most likely, the bull market will only gain momentum by the summer of this year. The COT report shows that long non-profit positions rose from 45,270 to the level of 52,851. Simultaneously, the short non-profit rose from the level of 25,219 to the level of 27,261, bringing the non-profit net position up to the level of 25,590 from the level of 19,951 a week earlier. The weekly closing price, on the contrary, fell to 1.3753 from 1.3913.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily averages, which indicates an attempt by the bears to regain control of the market.

Note: The period and prices of the moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

The fall of the pound will be stopped near the lower border of the indicator in the area of 1.3860.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
• Long non-commercial positions represent the total long open position of non-commercial traders.
• Short non-commercial positions represent the total short open position of non-commercial traders.
• Total non-commercial net position is the difference between the short and long positions of non-commercial traders.